Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator
[2002] WASC 316
SOUTHERN CROSS PIPELINES AUSTRALIA PTY LTD & ORS -v- KENNETH COMNINOS MICHAEL WESTERN AUSTRALIAN INDEPENDENT GAS PIPELINES ACCESS REGULATOR & ORS [2002] WASC 316
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 316 | |
| Case No: | CIV:2904/2001 | 17 DECEMBER 2002 | |
| Coram: | EM HEENAN J | 17/12/02 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Leave to discontinue granted | ||
| B | |||
| PDF Version |
| Parties: | SOUTHERN CROSS PIPELINES AUSTRALIA PTY LTD (ACN 084 521 997) SOUTHERN CROSS PIPELINES (NPL) AUSTRALIA PTY LTD (ACN 085 991 948) DUKE ENERGY WA POWER PTY LTD (ACN 058 070 689) KENNETH COMNINOS MICHAEL WESTERN AUSTRALIAN INDEPENDENT GAS PIPELINES ACCESS REGULATOR THE STATE OF WESTERN AUSTRALIA WMC RESOURCES LTD |
Catchwords: | Leave to discontinue Conditions Discontinuing party seeking costs against a defendant Leave granted to discontinue No order for costs |
Legislation: | Supreme Court Act 1935 |
Case References: | BTR plc & Anor v Westinghouse Brake and Signal Co (Australia) Ltd (1992) 34 FCR 246 O'Neill v Mann [2000] FCA 1680 Our Town FM Pty Ltd v Australian Broadcasting Tribunal & Anor (No 3) (1987) 77 ALR 609 Re Dr Ken Michael AM, ex parte Epic Energy (WA) Nominees Pty Ltd & Anor [2002] WASCA 231; (2002) 25 WAR 511 Re Minister for Immigration and Ethnic Affairs; Ex parte King (1997) 186 CLR 622 Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813 Commonwealth of Australia v Human Rights and Equal Opportunity Commission & Anor (1995) 63 FCR 74 MIMA v Yusuf (2001) 206 CLR 323 National Competition Council v Hamersley Iron Pty Ltd & Ors (1999) 167 ALD 109 Otter Gold Mines Ltd v Australian Securities Commission & Ors (1997) 25 ACSR 382 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 Re Lewis; ex parte City of Subiaco, unreported; FCt SCt of WA; Library No 970051; 19 February 1997 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
SOUTHERN CROSS PIPELINES (NPL) AUSTRALIA PTY LTD (ACN 085 991 948)
Second Plaintiff
DUKE ENERGY WA POWER PTY LTD (ACN 058 070 689)
Third Plaintiff
AND
KENNETH COMNINOS MICHAEL WESTERN AUSTRALIAN INDEPENDENT GAS PIPELINES ACCESS REGULATOR
First Defendant
THE STATE OF WESTERN AUSTRALIA
Second Defendant
WMC RESOURCES LTD
Third Defendant
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Catchwords:
Leave to discontinue - Conditions - Discontinuing party seeking costs against a defendant - Leave granted to discontinue - No order for costs
Legislation:
Supreme Court Act1935
Result:
Leave to discontinue granted
Category: B
Representation:
Counsel:
First Plaintiff : Mr M J Buss QC & Mr G Castledine
Second Plaintiff : Mr M J Buss QC & Mr G Castledine
Third Plaintiff : Mr M J Buss QC & Mr G Castledine
First Defendant : Mr C G Colvin SC & Mr S R Adams
Second Defendant : Ms J C Pritchard
Third Defendant : Mr G H Murphy
Solicitors:
First Plaintiff : Minter Ellison
Second Plaintiff : Minter Ellison
Third Plaintiff : Minter Ellison
First Defendant : Corrs Chambers Westgarth
Second Defendant : State Crown Solicitor
Third Defendant : Clayton Utz
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Case(s) referred to in judgment(s):
BTR plc & Anor v Westinghouse Brake and Signal Co (Australia) Ltd (1992) 34 FCR 246
O'Neill v Mann [2000] FCA 1180
Our Town FM Pty Ltd v Australian Broadcasting Tribunal & Anor (No 3) (1987) 77 ALR 609
Re Dr Ken Michael AM, ex parte Epic Energy (WA) Nominees Pty Ltd & Anor [2002] WASCA 231; (2002) 25 WAR 511
Re Minister for Immigration and Ethnic Affairs; Ex parte King (1997) 186 CLR 622
Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813
Case(s) also cited:
Commonwealth of Australia v Human Rights and Equal Opportunity Commission & Anor (1995) 63 FCR 74
MIMA v Yusuf (2001) 206 CLR 323
National Competition Council v Hamersley Iron Pty Ltd & Ors (1999) 167 ALD 109
Otter Gold Mines Ltd v Australian Securities Commission & Ors (1997) 25 ACSR 382
R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13
Re Lewis; ex parte City of Subiaco, unreported; FCt SCt of WA; Library No 970051; 19 February 1997
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1 EM HEENAN J: The plaintiffs in this litigation have brought an application by chamber summons for leave to discontinue this action on terms. The terms proposed are that, save as for some matters that I shall mention in a moment and for the order for costs made by the Full Court in its decision of 21 November, there should be no costs payable by any of the parties on this discontinuance. The exception is that the plaintiffs seek an order that the first defendant pay the plaintiffs' costs of the action, including any reserved costs. I am asked to consider whether or not leave to discontinue should be granted and if so upon what terms as to costs.
2 Save for the first defendant, no other party is seeking costs from any other party in the event that leave to discontinue is granted. Proposed interveners whose applications for joinder have been stood over pending the decision of the Full Court have announced that they will not be seeking any order as to costs of their application for intervention and no party is seeking costs against them in respect of that application.
3 The question of costs in any action of course is a discretionary one, although the discretion must be exercised judicially and in accordance with established principles. It is necessary therefore to state briefly the circumstances which have led to this application for leave to discontinue.
4 The determining factor appears to be the decision of the Full Court of this Court in the case of Re Dr Ken Michael AM, ex parte Epic Energy (WA) Nominees Pty Ltd & Anor [2002] WASCA 231; (2002) 25 WAR 511 which, in litigation between this Regulator and other parties concerning a different gas pipeline, it was decided that the Regulator in that case had made certain errors of law in construing the Access Code, and in interpreting it, when coming to consider what tariffs should be imposed.
5 For reasons which are set out fully in the judgment of Parker J in the Epic Energy case, and which were agreed by Malcolm CJ and Anderson J, it was established that there were errors made in the application of the access code by the Regulator in the Epic situation. Subsequent to the decision of the Full Court in Epic, the Regulator in this case, the same person, has acknowledged that his draft decision in setting tariffs for the goldfields gas pipeline is, to an extent, affected by errors of law which were identified in the Epic decision and, consequently, the Regulator has decided to reconsider his draft decision and to amend it.
6 The first defendant, as Regulator, has published a notice which is in evidence, dated 6 November 2002, outlining the basis upon which he
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- intends to reconsider his draft decision and the factors which will be the subject of amendments in the draft decision consequent upon the Epic case and the stages which he intends to follow in this process. As a result of the practical abandonment by the Regulator of the draft decision, which is the subject of challenge at these proceedings, these plaintiffs have decided that it is unnecessary and inappropriate to maintain the current litigation in order to challenge a decision which, by this announcement, it is accepted must in any event be amended.
7 All other parties join in accepting that approach and those consequences and accordingly there is every reason for leave to discontinue to be granted in this case and I shall grant leave. The only question which remains is as to terms.
8 The submission of the plaintiffs is that a significant, perhaps even a substantial, success has been achieved by them by the acknowledgment by the Regulator that the draft decision was flawed and is to be amended, and that consequent upon that decision the plaintiffs have secured, to a significant degree, the relief which they might have obtained had they been successful in this action. Accordingly, they ask for an order that the first defendant should pay some, or all, of their costs.
9 In the course of argument counsel for the plaintiffs acknowledged that some proportion of the costs should be identified which would fairly reflect the degree to which the abandonment by the regulator of his adherence to the draft decision afforded a vindication or a recognition of the plaintiffs' claims. It is easy to understand that argument in principle. Its application in the circumstances and the working out of its application when it comes to quantifying any entitlement to costs is likely to prove difficult. Difficulties of that kind, however, are no reason to decline to follow and apply the dictates of principle.
10 The problem which is posed by the application by the plaintiffs for an order for costs against the first defendant in the present case are caused essentially by the fact that the concessions by the first defendant only represent one part of the claims being made by the plaintiffs in the action. There is considerable room for controversy and debate about how significant they are. Put another way: it is now very difficult, if not impossible, to say whether the course of the action taken by the plaintiffs would have been materially different, perhaps more importantly, occasioned with less effort and costs had the first defendant made these concessions earlier or failed to put in issue the propriety of his decision on these grounds.
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11 There are a mixture of things in the consideration of the principles applying to the exercise of the Court's discretion over costs in these circumstances. There is the established convention that costs are seldom awarded against a public official such as a Regulator whose official decisions are called into question in litigation, where the Regulator does no more than submit to the jurisdiction of the Court and indicate that he will abide by the decision of the Court in due course. It is accepted on all sides that where that is done, it would be rare for an order for costs to be made against the public official. There are many instances where that principle has been discussed and applied or where departure from the minimalist position by the public official has resulted in the loss of immunity for costs. Some of these cases have been cited this afternoon. They include: BTR plc & Anor v Westinghouse Brake and Signal Co (Australia) Ltd (1992) 34 FCR 246 (Full Court of the Federal Court), in particularly in the analysis contained in the joint judgment of Lockhart and Hill JJ at 265; the decision of Our Town FM Pty Ltd v Australian Broadcasting Tribunal & Anor (No 3) (1987) 77 ALR 609, particularly in the judgment of Wilcox J at 612; and Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813, Drummond J, Fed Ct Aust.
12 I have been invited to decide that the role of the Regulator in this case went beyond that of a submitting appearance and constituted an adversarial role, taking the Regulator outside the scope of the immunity. I am by no means convinced that is the situation. It is true that on the pleadings the Regulator has denied or put in issue allegations by the plaintiffs as to his entitlement to consider particular factors when reaching a draft decision and it is true as well that in respect of some of those pleas the decision in the Epic case has revealed the Regulator to have made errors of law, but to put those matters in issue and to advance the reasons for the Regulator's decision and his entitlement to take into account particular factors does not appear to me to be adopting an adversarial role in the sense referred to in the authorities which I have cited. Rather, it is my impression that the first defendant has set out to identify what it was that he has considered and why he considered himself to be entitled to take that view and I do not regard that as trespassing beyond the province recognised for a public official in like circumstances.
13 However, even if I were to take a different view on that aspect of the case, I am by no means satisfied that by pleading those factors in his defence the first defendant has increased, to any significant degree, the costs incurred by the plaintiffs in initiating and pursuing this litigation. One of the reasons for that conclusion is that I am satisfied that in order to
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- vindicate their claims, the plaintiffs would have been obliged to set out in detail the reasons why they contended the first defendant was in error in interpreting and applying the Access Code. It appears to me that their approach to this action and to the drafting of the statement of claim and its subsequent amendment are unlikely to have been materially different had the first defendant taken a completely non-contentious stance. Accordingly, I am not disposed to make any determination about costs on the footing that the first defendant, by his defence of the action and conduct of the proceedings, went beyond the permitted scope for a public official.
14 We then come to the question of whether or not by acknowledging that the draft decision was vitiated by errors recognised in the Epic decision the Regulator has nevertheless made a concession which represents a significant victory for the plaintiffs in the sense that it has achieved for them in large measure relief which they were seeking in the proceedings.
15 On this issue I consider the plaintiffs to be on much firmer ground. There can be little doubt that, by publishing the notice of 6 November 2002, the Regulator has acknowledged that this draft decision must be discarded, amended and replaced and that this in effect removes the decision which was under challenge by the plaintiffs. However, that acknowledgment does not represent complete success for the plaintiffs because a draft decision as to tariffs remains to be made. Further submissions have been called for. The unresolved issue, not touched upon in the Epic case, of the effect of subcl 21(3) of the State agreement remains for consideration. It is even apparent that there is a difference of view between the second defendant and the first defendant and perhaps others as to the responsibility for giving effect to considerations identified in subcl 21(3) of the State agreement.
16 These issues have been identified by counsel for the second defendant here this afternoon. What emerges from the decision of the Regulator of 6 November 2002 to amend the draft decision clearly is that all issues remain for consideration in the near future and it is possible that many of the issues raised by the plaintiffs in these proceedings will be put to the Regulator during the course of that process and, if rejected, may form the basis of some subsequent challenge to any ultimate draft decision which the Regulator reaches by this new process.
17 Consequently, although the decision of 6 November to recommit the draft decision for further consideration and amendment is a partial
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- acknowledge of the plaintiffs' arguments in this litigation, it is by no means an acceptance of all of them or indeed any of them which would lead, of necessity, to the plaintiffs succeeding in obtaining the ultimate relief which they have been seeking throughout.
18 This leads on to the question of how a Court should consider the exercise of discretion over costs for a party who is seeking leave to discontinue. There are several authorities and writings which bear on this question. There is one passage in the Supreme Court Practice (the White Book), at par 21/2-5/12, dealing with applications for leave to discontinue, saying that the Court has a wide discretion as to the terms upon which it may grant leave to a plaintiff or to a defendant to discontinue or withdraw the whole or part of the action or counterclaim, and that the Court may impose terms as to costs as to the bringing of a subsequent action or otherwise as it thinks just. With respect to terms as to costs, the commentary says that the order should provide for the payment of the costs of the action, the general rule being that a defendant is entitled to costs when an action is discontinued but that this may have to be departed from in a case where the discontinuance of the proceedings is due to the matter having become academic rather than to any acknowledgment by the plaintiff of likely defeat.
19 The position has also been discussed by Finn J of the Federal Court of Australia in O'Neill v Mann [2000] FCA 1180 where in par 12 his Honour says:
"The costs consequence to a discontinuing party where leave is required and granted is somewhat more complex. Unlike with the previous two categories, the rules do not provide expressly for the incidence of costs on discontinuance with the leave. The Court's power to award costs being a general one provided for by section 43(1) of the Federal Court of Australia Act and Order 62 of the Rules, it is a discretionary power to be exercised judicially, Mineralogy Pty Ltd v National Native Title Tribunal 23 December 1998."
20 I accept, with respect, the application of those principles in the present situation under the Supreme Court Act in this state and the Rules of this Court. Finn J continued:
"It can properly be said that there is an underlying policy in the rules that the discontinuing party should be liable for the other party's costs unless the Court orders otherwise, Grundy v Lewis
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- May 1998, but so various can be the reasons for and the circumstances of discontinuance that the policy cannot safely be said to have hardened into a usual rule where leave is granted, such as exists where there has been a determination of a claim on its merits. The conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs."
21 His Honour went on to cite a passage from the judgment of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte King (1997) 186 CLR 622 at 625 in the following terms:
"If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, a proper exercise of the costs discretion will usually mean that the Court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."
22 In my view the plaintiffs in this litigation have acted reasonably in commencing and pursuing this litigation up to the point where this discontinuance is proposed. The factor inducing the decision to seek leave to discontinue, namely, the combined effect of the decision of the Full Court in Epic, and the acceptance of that decision to the present circumstances by the Regulator as evidenced by his notice of 6 November 2002, seems to me to be unquestionably a reasonable consideration in the circumstances. It also appears to me that in an action of this magnitude and complexity, it was reasonable for the Regulator to defend these proceedings, at least up until the point where the decision in Epicwas given, and then to reconsider his position in the light of the Epicdecision as has been done.
23 In those circumstances, I consider, to adapt the language of McHugh J, that further prosecution of this action in the present circumstances is obviously futile and the reasonable course on all sides was to reconsider the draft decision in the light of Epicand for the Regulator to give further attention to submissions from the parties.
24 The authorities which I have so far cited and examined deal only with cases where the party who is seeking leave to discontinue, is seeking to be relieved of the consequences of the common practice of being obliged to pay its opponent's costs of the proceedings consequent upon the
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- discontinuance. No case has been cited to me where, on a discontinuance, the party discontinuing has secured an order for costs against one of the opponents who has denied any liability to pay costs. The closest that any commentary has come to such a situation is the passage cited by Mr Buss QC this afternoon from the well-known authority by the Hon P L Seaman QC on the Rules of this Court which discusses the principle behind the decision in O'Neill v Mann, already cited, and ventures the opinion that in a situation where the party discontinuing has done so as a result of a concession by opponents which clearly recognises the entitlement of the discontinuing party to the relief which was sought, there would be power to order costs.
25 I do not think that it is necessary to make any final determination as to whether that is so or not but, even if it is, I do not consider that that principle would justify an award for costs being made against the first defendant in this case where it is not possible, in my view, to determine that but for the errors identified in Epic, this litigation would have been unnecessary or that the plaintiffs would have been entitled to the relief which they had been seeking in the proceedings.
26 Again, to resort to the language of McHugh J in Ex parte King, it seems to me that it is not really possible to tell at this stage what the influence of any erroneous decision of the Regulator based on the factors identified in Epichave had or would have had on the outcome in these proceedings had the Regulator not made the concession. In one sense, it can be said that they would probably of themselves have been sufficient to have the draft decision of the Regulator quashed, but that would not have achieved all the relief which the plaintiffs were seeking. The question really remains at large as to whether tariffs at or near the amount set by the Regulator in the draft decision are justifiable having regard to the statutory and contractual obligations between these parties, and that remains an unresolved question.
27 It seems to me that in these circumstances and in the exercise of my discretion, I should direct that the plaintiffs may have leave to discontinue but that there should be no order requiring the first defendant to pay the plaintiffs' costs. Whether in those circumstances the plaintiffs will discontinue or discontinue against the first defendant will be a matter for the plaintiffs.
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